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Majority of Hedge Fund Assets Under Management Now From Institutional Investors

04 March 2009

An absolute majority of all assets under management by hedge funds and funds of hedge funds globally are from institutional investors. And a third of those assets from institutional investors now come from pension funds. That is according to the Alternative Investment Management Association (“AIMA”), the international trade body for the hedge fund industry.

The new research from AIMA defines institutional investors as pension funds, university endowments, foundations and governmental authorities. The figures were produced by AIMA’s research department, and were based on extensive consultation with the association’s members. AIMA has more than 1,200 corporate members in 43 countries globally, including the leading industry hedge fund managers, fund of hedge funds managers, advisers and service providers.

Tom Kehoe, Research Manager of AIMA, explained, “Traditionally, high net worth individuals accounted for most of the assets under management (AUM) by the hedge fund industry globally but institutional investors have been steadily increasing in significance in recent years and we think they now account for an absolute majority of AUM. Pension funds account for about a third of that, or one-sixth overall. These figures are estimates, but they are informed by all the data at our disposal.”

Andrew Baker, Chief Executive of AIMA, said, “These figures demonstrate that the hedge fund industry plays an extremely important role globally for the institutions that look after everyone’s pensions and savings. Hedge funds and funds of funds are skilled at managing risk and delivering stable returns, which institutions need at this time more than ever. They offer an extension of investment capabilities to institutional investors through their skills and expertise.”

About AIMA
As the only truly representative global hedge fund association, AIMA, the Alternative Investment Management Association, has more than 1,200 corporate members worldwide, based in 43 countries.

Members include leading hedge fund managers, fund of hedge funds managers, prime brokers, legal and accounting firms and fund administrators. They all benefit from AIMA’s active influence in policy development, its leadership in industry initiatives, including education and sound practice manuals and its excellent reputation with regulators worldwide.

AIMA is a dynamic organisation that reflects its members’ interests and provides them with a vibrant global network. AIMA is committed to developing industry skills and education standards and is a co-founder of the Chartered Alternative Investment Analyst designation (CAIA) – the industry’s first and only specialised educational standard for alternative investment specialists. For further information, please visit AIMA’s website, www.aima.org.